Insurance Matters

Captians beware; what you should know about boat insurace...

Boat insurance is essential to protect the owner from financial losses because of storms, fire, sinking of the boat or collision. Boat insurance is similar to car insurance but involves different features in terms of coverage. In recent times, there has been an increased risk of property damage to boats. It is always prudent to insure your boat or yacht to secure your own peace of mind.

Insurance Premiums:

There are many factors that affect the calculation of premium rates. Generally, the insurer will set a premium rate that is fair to both the parties. The degree of risk that is involved in insuring a boat is assessed by taking into account the type and age of the boat as well as the experience of the owner, what the boat will be used for and where it will be sailing. Location factors such as mooring in a marina or at a tidal estuary also can affect the premium rates.

Valuation of the Boat:

Usually the insurer has a rough idea of the value of the boat, though the owner may also decide the value and settle on the amount of insurance he needs. However, the insurers may ask for a professional valuation if they do not agree with the owner's estimate. The principle of insurance is to indemnify the policyholder. It is possible to insure the boat for more than its valuation, especially in the initial period, so that the boat can be replaced in case of any damage or a total loss of the craft.

Boat Survey:

We may want to undertake a survey of the boat after a certain period of time to assess the condition and seaworthiness of the vessel. The survey helps the insurer to assess the degree of risk involved. A survey is beneficial to the owner as well because he gets an idea of the repairs and maintenance work that need to be undertaken for the boat.

Claims:

Once the marine insurance policyholder puts forth a claim, the insurance company will assess the claim. It may appoint a surveyor or a loss adjuster to look into the circumstances of the accident, inspect the damages to the boat, determine the cause of the damages and verify whether the damage cause is consistent with the event that has been reported. There is the possibility of fraudulent claims being made just to replace parts of the boat. To protect against this eventuality, the insurance provider may settle some of the items at market value at the time of loss. Claim settlement is often reduced to allow for depreciation of items that have a limited lifespan.